Misbehaving

Misbehaving: Summary

The exam that started everything

Picture this. You are a university professor, and your students are furious with you. Not because your exam is hard. The distribution of scores is exactly what it should be: some people do well, some do less well, and the average lands somewhere in the middle. The only problem is that this average is seventy-two points out of a possible hundred. And the students experience that as a catastrophe. Seventy-two? That is barely more than halfway. And they had worked so hard for it.

The young professor was named Richard Thaler, and he did something that would have made every economist colleague wince. On the next exam he did not make the questions easier. He did not improve anyone's grade. He changed exactly one thing: he raised the maximum possible score from a hundred to a hundred and thirty-seven. Same difficulty, same distribution, same final grades. The average just suddenly became ninety-six. And the result? The students were delighted. They never complained again. Thaler even printed it in bold in his syllabus: the new scoring system has no effect on the grade you get in the course, but it seems to make you happier.

Here is where the truth is buried. Seventy-two and ninety-six represented the exact same performance. By common sense the number itself is completely meaningless. Yet it changed how people felt. Thaler later called this a supposedly irrelevant factor: something that, according to classical economics, should have no role whatsoever, yet keeps tugging at our behavior again and again. This book is about how he built an entire discipline out of small, stubborn observations like that one. And about how he fought for it against a profession that for decades refused to even listen.